4 Things That Will Kill Your Mortgage Approval… Prior to Getting the Keys to Your New Home

Kelly Hudson • June 15, 2021

You found your dream home and have an accepted offer. You supplied all the needed documentation to your mortgage broker & LENDER, and you are waiting for the day that you go to the lawyers to sign the final paperwork and pick up your keys on possession day...

 

Suddenly your lawyer calls to say that there is a problem. Why is this happening? Everything has been signed and conditions have been removed. 

 

What many home buyers do not realize is that your financing approval is based on the information the lender was provided at the time of the application. If there have been any changes to your situation, the lender is within their rights to cancel your mortgage approval. 


Short Version: It is critical that you maintain the same financial position that you were in when you applied for your mortgage. The lender reserves the right to withdraw financing if your financials change and you no longer qualify for the mortgage. In other words:

 

  • don’t apply for any new credit & don’t have your credit bureau run again (in case it lowers your score) 
  • don’t make any big purchases and increase your debts from what they currently are. 
  • make sure that your employment situation stays the same.
  • make all your payments on time! 

 

Longer version: Here are 4 things you absolutely must avoid to ensure that you get financing for your dream home.


 

  • Debt - A week or two before your possession date, the lender can obtain a copy of your credit report and look for any changes to your debt load. Your approval was based on how much you owed when you applied. Buying a new car or items for the new home need to be postponed until after you take possession of your new home.
  • Don’t be fooled by “Do not pay for 12 months” sales campaigns. You now owe this money regardless of when the payments start. Don’t buy a new car and don’t buy furniture for the new home. This will increase your debt ratio and could nullify your financing.
  • Don’t Co-Sign loans for someone else 
  • BLOG Would a Co-Signer Enable You to Qualify for a Mortgage?
  • Before making any decision on a large purchase, check with your Mortgage Broker. You need to ensure that your mortgage affordability still works with the additional debt.


  • Changing Jobs
  • There are many opportunities that some with a new job, however before deciding to change your employment situation, keep the following in mind:
  • Quitting/being terminated from your job. Lenders want to ensure you can afford your mortgage up until your possession date. If they find out you no longer have employment income and can’t afford your mortgage payments, they can pull your mortgage funding.
  • If you are accepting a new position, you need to check if you will be on probation. Mortgage lenders typically will NOT accept employment income until you’ve passed probation.
  • If your income situation is changing 
  • i.e. bonuses, overtime & commissions, lenders typically require a 2 year history to prove the additional income is ongoing, before including them with your annual income.
  • If you are considered a contractor or self-employed – you must provide 2 full calendar years history (plus your Notice of Assessment tax returns). BLOG Self Employed?? Here’s What You Need to Know About Mortgages



  • Making Late Payments
  • While waiting for your mortgage to complete, make sure you pay all your debts on time! 
  • The lender can run your credit bureau anytime up until possession date… if they see a lower credit score and/or you’ve missed payments or increased your debt load they can pull your mortgage funding.


Getting approved and staying approved for a mortgage does not have to be difficult – you need to work with your mortgage broker to ensure there are no surprises.


Mortgages are complicated, but they don’t have to be… Engage an expert!

 

Kelly Hudson

Mortgage Broker

Mortgage Architects

Mobile: 604-312-5009

Kelly@KellyHudsonMortgages.com
www.KellyHudsonMortgages.com

Kelly Hudson
MORTGAGE ARCHITECTS
RECENT POSTS 

Mortgages Made Simple: Understanding Fixed vs. Variable Interest Rates in Canada

By Kelly Hudson • March 17, 2025
Since March 2022, mortgage rates in Canada have risen significantly, raising concerns for homeowners and potential buyers. But what drives these changes, and how do they impact your choice between fixed and variable mortgage rates? Let's simplify this important financial topic.

Getting a Mortgage After Separation or Divorce in Canada: What You Need to Know

By Kelly Hudson • February 14, 2025
Separation and divorce are major life events that significantly impact finances—including homeownership. In Canada, approximately 40% of marriages end in divorce , making it a common challenge for homeowners. As a mortgage broker, I work with many clients who are navigating the challenges of keeping or selling their home, refinancing, or qualifying for a new mortgage post-separation. Lenders assess these applications differently than standard ones, particularly when it comes to income, debts, and liabilities . Whether you want to stay in your current home or move on to a new one, understanding your mortgage options is essential. How Separation & Divorce Impact Your Mortgage When separating from a spouse, one of the biggest financial decisions is what to do with the family home. Here are some common scenarios: 1. Keeping the Home If one spouse wants to stay in the home, they must refinance the mortgage to remove the other person’s name from title and buy out their ex’s share of the equity. 2. Selling the Home In some cases, selling the home and splitting the proceeds is the best financial option. This provides a clean break but requires both parties to qualify for new mortgages if they wish to buy separate homes. 3. Co-Owning After Separation Some ex-partners choose to co-own the home for a period, often for the sake of stability for children. While this may work temporarily, it will complicate future borrowing power . 4. Existing Mortgage Responsibilities Even if a separation agreement states that one party is responsible for the mortgage, lenders will still consider both parties liable unless the mortgage is refinanced and the ex’s name is removed from the title & the mortgage. Important : If both names remain on the mortgage and your ex stops making payments, your credit score and future borrowing ability will be affected .
Share by: